This article has been modified to reflect the following correction: There is a remaining challenge to the Arts Tax, filed by Portland resident George Wittemyer and currently before the Oregon Court of Appeals.

NEARLY two years after voters approved it in 2012, the controversial Portland Arts Tax isn't quite out from under legal threat.

The window for appeal of the most recent challenge—filed by Lewis & Clark law professor and erstwhile blogger Jack Bogdanski—closed April 9. But another challenge, by Portland resident George Wittemyer, is before the Oregon Court of Appeals.

Even without legal wrangling, though, the tax's remaining challenges are considerable. Two years in, the city's still finding its feet in administering the charge, and that's got city leaders thinking twice about how best to collect a proposed "transportation user fee" to help out the underfunded Portland Bureau of Transportation.

Since May, the Portland Revenue Bureau has sent out nearly 90,000 letters to Portlanders it believes haven't paid the tax over the past two years, threatening to add a penalty. Those letters—and "other reminders," officials say—have jogged taxpayers' memories to the tune of $1.1 million.

But they've also caused anger and confusion.

Take the case of one Southwest Portland woman who reached out to the Mercury, but requested she not be named. Unlike 30 percent to 35 percent of eligible Portlanders, this woman paid her $35 tax last year. She paid the tax this year, too, according to a receipt she provided to the Mercury.

And yet, earlier this month, she received a letter from the city saying she'd better pay up. If she didn't pony up by July 11, the letter said, she'd be charged an extra $15.

It was a misunderstanding, of course. The woman's tax was paid in 2013 using her first, middle, and last names. This time around, her husband used the woman's hyphenated last name when paying, confusing the city's system into creating a separate account.

Abby Coppock, a spokeswoman for the Portland Office of Management and Finance, says the revenue bureau isn't keeping tabs on how many people have been falsely flagged as not paying.

But similar misunderstandings could crop up if a person's changed a name because of marriage, or if they incorrectly enters the last four digits of their Social Security number when paying online. The city is building a database of taxpayers as it goes, and it's not hard to send the system into confusion.

"This is a part of [the revenue bureau] getting their system up and running now that they have two years of comparative data," Coppock says. "Part of this effort is just to get a larger cleanup of the database."

According to the latest figures, the city has collected $8.3 million in Arts Tax money for tax year 2012—a 65 to 70 percent compliance rate, according to Coppock, most of it doled out to local school districts for arts education. The city says it's received $6.3 million for 2013, although officials won't yet give a compliance rate. The tax was initially estimated to draw $12 million (that was before exceptions were crafted for low-income Portlanders and people under 18).

The ongoing challenges have contributed to the uncertainty surrounding the city's latest controversial revenue idea: the "transportation user fee" proposed by Mayor Charlie Hales and Commissioner Steve Novick.

In town halls and other appearances this year, Novick said Portlanders had been clear they didn't want to pay that so-called "street fee" as part of their water and sewer bills, and so dismissed that possibility. The commissioner also defended collection of the Arts Tax, pointing out compliance has grown.

That's since changed. Both Novick and Hales have repeatedly praised the efficiency of collection via utility bills, which they peg at about 98 percent.

"We could use the same collection 'platform' as water and sewer without actually putting it on the water and sewer bill," Novick told the Mercury on Monday, June 23, "and make it a separate bill generated by the same system."